Unfinished business

January 23, 2007

It seems odd to hear a 47 percent rate increase described as good news, but Baltimore Gas and Electric Co. customers are likely past sticker shock. At least it's better than 72 percent - the amount BGE was scheduled to impose last year until lawmakers intervened with a 15 percent cap and deferral of the balance. The net effect is that beginning in June, electricity from BGE may cost 65 percent more than it did before last summer (back when prices were capped at pre-1993 levels).

Market rates couldn't be forestalled forever, at least not in an era of deregulation. That the proposed rate is modestly better than what had been in the offing last year appears to be caused entirely by the vagaries of the wholesale energy market and a downturn in the price of natural gas. Indeed, consumers may find as much relief in the winter's mild weather, which has somewhat lessened heating bills, at least so far this season.

BGE's rate proposal must now be reviewed by the Maryland Public Service Commission, and this is where matters get dicey. While the rate proposal appears reasonable under the circumstances, the PSC evaluation must be thorough and transparent. Unfortunately, the commission's handling of last year's rate proposal was unacceptable. The General Assembly's subsequent effort to reconstitute the PSC was rejected by the state's highest court, so the commission's credibility problem remains.

The PSC wasn't responsible for high global energy prices. But Robert L. Ehrlich Jr.'s industry-friendly appointees were to blame for firing experienced PSC staff and for not properly reviewing the original BGE rate proposal or accommodating public participation in that process.

Maryland is not well-served if the current PSC is seen as rubberstamping another rate increase. It won't necessarily help BGE in the long term, either. What is needed is for PSC Chairman Kenneth D. Schisler to voluntarily step down now (before his five-year term expires next year) so that a new appointee can oversee the review. This would be the least disruptive course of action and clearly the most sensible.

Other options - action by the legislature or Mr. Schisler's removal for cause by Gov. Martin O'Malley - could prompt costly legal battles that would only prolong matters.

Much is at stake. Last year, lawmakers ordered the PSC to study deregulation and review myriad options for reducing electricity costs for consumers, possibly even reregulating the market. But that was predicated on new PSC leadership. Without it, that process is in limbo. And that's unmitigated bad news for BGE customers - and for fellow ratepayers across the state.